What changed in this filing

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Item 1. Financial Statements

2025-02-07 compared with 2024-08-08 · 281 added, 448 removed, 604 unchanged (55% of the section changed)

3 unchanged sentences

(dollars in thousands, except per-share amounts)

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Cash $ 7,407 $ 4,601

Trade receivables, net of allowance for doubtful accounts of $ 1.2 million at June 30, 2024 and $ 1.6 million at September 30, 2023

Trade receivables, net of allowance for doubtful accounts of $ 1.4 million at December 31, 2024 and $ 1.5 million at September 30, 2024

38,040 46,861

Inventories, net 123,389 126,350

Income taxes receivable — 1,116

Prepaid expenses and other current assets 3,594 4,123

21 unchanged sentences

Seller notes - related parties 41,119 40,361

Deferred taxes 8,974 14,035

Deferred tax liability, net 5,812 6,267

Other non-current obligations 3,882 6,655

2 unchanged sentences

Stockholders' equity:

Series E convertible preferred stock, $ 0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively, with a liquidation preference of $ 0.30 per share outstanding

Common stock, $ 0.001 par value, 10,000,000 shares authorized, 3,131,633 and 3,164,330 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively

Series E convertible preferred stock, $ 0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at December 31, 2024 and September 30, 2024, with a liquidation preference of $ 0.30 per share outstanding

Common stock, $ 0.001 par value, 10,000,000 shares authorized, 3,115,674 and 3,131,360 shares issued and outstanding at December 31, 2024 and September 30, 2024, respectively

Paid in capital 69,743 69,692

Treasury stock common 694,414 and 660,063 shares as of June 30, 2024 and September 30, 2023, respectively

Treasury stock common 710,373 and 694,687 shares as of December 31, 2024 and September 30, 2024, respectively

( 9,229 ) ( 9,072 )

Treasury stock Series E preferred 80,000 shares as of June 30, 2024 and September 30, 2023, respectively

Treasury stock Series E preferred 80,000 shares as of December 31, 2024 and September 30, 2024

Retained earnings 12,766 12,274

3 unchanged sentences

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(dollars in thousands, except per-share amounts)

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

For the Three Months Ended December 31,

Revenue $ 111,508 $ 117,593

8 unchanged sentences

Interest expense, net ( 4,162 ) ( 4,163 )

Salomon Whitney settlement — 1,000 — 2,000

Loss on disposition of Salomon Whitney — ( 1,696 ) — ( 1,696 )

Loss on disposition of Johnson ( 301 ) — ( 301 ) —

Other expense ( 420 ) ( 23 ) ( 197 ) ( 693 )

Gain on extinguishment of debt 713 —

Gain on settlement of earnout liability 2,840 —

Other income (expense) 420 ( 284 )

Total other expense, net ( 189 ) ( 4,447 )

(Loss) income before provision for income taxes ( 3,823 ) 1,357 ( 9,227 ) 5,924

(Benefit) provision for income taxes ( 968 ) 297 ( 2,409 ) 1,462

Net (loss) income $ ( 2,855 ) $ 1,060 $ ( 6,818 ) $ 4,462

(Loss) income per share:

Basic $ ( 0.91 ) $ 0.33 $ ( 2.16 ) $ 1.43

Diluted $ ( 0.91 ) $ 0.33 $ ( 2.16 ) $ 1.42

Income (loss) before provision for income taxes 573 ( 906 )

Provision (benefit) for income taxes 81 ( 224 )

Net Income (loss) $ 492 $ ( 682 )

Income (loss) per share:

Basic and diluted $ 0.16 $ ( 0.22 )

Weighted average common shares outstanding:

5 unchanged sentences

(dollars in thousands)

For the Nine Months Ended June 30,

For the Three Months Ended December 31,

Operating Activities:

Net (loss) income $ ( 6,818 ) $ 4,462

Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of acquisition:

Net income (loss) $ 492 $ ( 682 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities, net of acquisition:

Depreciation and amortization 4,415 4,295

Loss on disposal of fixed assets — 29

Amortization of seller note discount 757 673

2 unchanged sentences

Amortization of right-of-use assets 1,031 1,143

Disposition of SW Financial, net of cash retained — 1,509

Loss on disposition of Johnson 301 —

Gain on extinguishment of debt ( 713 ) —

Gain on settlement of earnout liability ( 2,840 ) —

Change in deferred income taxes ( 455 ) ( 1,435 )

Change in allowance for doubtful accounts ( 110 ) ( 32 )

3 unchanged sentences

Inventories 3,035 267

Income taxes payable/receivable 1,741 316

Prepaid expenses and other current assets 531 468

2 unchanged sentences

Accrued liabilities ( 3,016 ) 3,700

Change in deferred income taxes ( 4,175 ) 4,227

Other liabilities — 63

Income taxes payable 535 1,547

Net cash provided by operating activities 9,400 7,872

2 unchanged sentences

Acquisition of Johnson — ( 500 )

Acquisition of Flooring Liquidators, net of cash acquired — ( 33,929 )

Acquisition of Midwest Grinding ( 1,000 ) —

Acquisition of Central Steel, net of cash acquired ( 10,474 ) —

Acquisition of Cal Coast Carpets — ( 1,300 )

Purchase of property and equipment ( 1,817 ) ( 1,655 )

1 unchanged sentence

Financing Activities:

Net borrowings under revolver loans 1,990 3,133

Net payments under revolver loans ( 3,121 ) ( 756 )

Net borrowings under related party revolver loans 1,570 —

Proceeds from issuance of notes payable 2,711 9,878

Payments on notes payable ( 5,064 ) ( 5,555 )

Proceeds from issuance of related party notes payable — 7,000

Payments on related party notes payable ( 300 ) —

Payments for debt acquisition costs — ( 98 )

Proceeds from the issuance of related party notes payable 1,932 —

Cash paid for settlement of seller notes ( 1,932 ) —

Payments on notes payable ( 1,770 ) ( 1,767 )

Purchase of common treasury stock ( 157 ) ( 107 )

Payments on financing leases ( 999 ) ( 793 )

Cash paid for net settlement of stock option exercise ( 20 ) ( 29 )

Proceeds from failed sales and leaseback transaction 7,869 —

Payments on seller finance arrangements — ( 51 )

Net cash provided by financing activities 4,527 11,669

Change in cash 402 ( 1,053 )

Net cash used in financing activities ( 4,777 ) ( 3,423 )

Increase in cash 2,806 1,260

Cash, beginning of period 4,601 4,309

2 unchanged sentences

Interest paid $ 3,284 $ 3,271

Income taxes paid, net $ — $ 102

Income taxes received $ — $ 346

Noncash financing and investing activities:

Noncash items related to Flooring Liquidators acquisition $ — $ 36,900

Noncash stock options exercise $ 94 $ 327

PMW goodwill adjustment $ — $ 233

Noncash items related to Central Steel acquisition $ 3,400 $ —

Noncash items related to CRO acquisition $ — $ 725

Noncash items related to Johnson acquisition $ — $ 1,501

Noncash debt discount on related party notes $ 713 $ —

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIVE VENTURES INCORPORATED

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(dollars in thousands)

4 unchanged sentences

Stock Retained

Earnings Non-controlling

Interest Total

Earnings Total

Balance, September 30, 2024 47,840 $ — 3,131,360 $ 2 $ 69,692 $ ( 7 ) $ ( 9,072 ) $ 12,274 $ 72,889

3 unchanged sentences

Balance, December 31, 2024 47,840 $ — 3,115,674 $ 2 $ 69,743 $ ( 7 ) $ ( 9,229 ) $ 12,766 $ 73,275

Stock based compensation — — — 50 — — — — 50

Purchase of common treasury stock — — ( 11,849 ) — — — ( 298 ) — — ( 298 )

Net loss — — — — — — — ( 3,281 ) — ( 3,281 )

Balance, March 31, 2024 47,840 $ — 0 3,148,135 $ 2 $ 69,487 $ ( 7 ) $ ( 8,610 ) $ 34,996 $ — $ 95,868

Stock based compensation — — — — 175 — — — — 175

Stock options exercise — — 2 — — — — — — —

Taxes paid on net settlement of stock options exercised — — — — ( 20 ) — — — — ( 20 )

Purchase of common treasury stock — — ( 18 ) — — — ( 458 ) — — ( 458 )

Net loss — — — — — — — ( 2,855 ) — ( 2,855 )

Balance, June 30, 2024 47,840 $ — 3,131,633 $ 2 $ 69,642 $ ( 7 ) $ ( 9,068 ) $ 32,141 $ — $ 92,710

Preferred Stock Common Stock Series E

3 unchanged sentences

Stock Retained

Earnings Non-controlling

Interest Total

Earnings Total

Balance, September 30, 2023 47,840 $ — 3,164,330 $ 2 $ 69,387 $ ( 7 ) $ ( 8,206 ) $ 38,959 $ 100,135

Purchase of common treasury stock — — ( 24,710 ) — — — ( 621 ) — ( 621 )

Net income — — — — — — — 1,844 — 1,844

Balance, December 31, 2022 47,840 $ — 3,050,123 $ 2 $ 65,321 $ ( 7 ) $ ( 7,836 ) $ 41,353 $ ( 448 ) $ 98,385

Purchase of common treasury stock — — ( 674 ) — — — ( 17 ) — — ( 17 )

Stock based compensation — — — — 50 — — — 50

Issuance of common stock — — 116,441 — 3,200 — — — — 3,200

Net income — — — — — — — 1,558 — 1,558

Balance, March 31, 2023 47,840 $ — 3,165,890 $ 2 $ 68,630 $ ( 7 ) $ ( 7,853 ) $ 42,911 $ ( 448 ) $ 103,235

Purchase of common treasury stock — — ( 4,346 ) — — — ( 106 ) — ( 106 )

Stock based compensation — — — — 287 — — — — 287

Taxes paid on net settlement of stock options exercised — — — — ( 29 ) — — — — ( 29 )

Stock options exercised — — 12,148 — — — — — — —

Net income — — — — — — — 1,060 — 1,060

Balance, June 30, 2023 #REF!

47,840 $ — 3,164,432 $ 2 $ 68,888 $ ( 7 ) $ ( 8,203 ) $ 43,971 $ ( 448 ) $ 104,203

Net loss — — — — — — — ( 682 ) ( 682 )

Balance, December 31, 2023 47,840 $ — 3,159,984 $ 2 $ 69,437 $ ( 7 ) $ ( 8,312 ) $ 38,277 $ 99,397

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2024 AND 2023

FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023

(dollars in thousands, except per-share amounts)

13 unchanged sentences

(“Kinetic”), which is engaged in the production of industrial knives and hardened wear products for the tissue and metals industries, Precision Metal Works, Inc.

(“PMW”), which is engaged in metal forming, assembly, and finishing solutions across diverse industries, including appliance, automotive, hardware, electrical, electronic, medical products, and devices, and CSF Holdings, LLC (“Central Steel”), a Chicago-based manufacturer of specialized fabricated metal products primarily for data centers and the communications industry.

(“PMW”), which is engaged in metal forming, assembly, and finishing solutions across diverse industries, including appliance, automotive, hardware, electrical, electronic, medical products, and devices, and Central Steel Fabricators, LLC ("Central Steel"), a Chicago-based manufacturer of specialized fabricated metal products primarily for data centers and the communications industry.

PMW reports on a 13-week quarter, as opposed to the Company's calendar quarter reporting.

6 unchanged sentences

In the opinion of the Company’s management, this interim information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods.

The results of operations for the three and nine months ended June 30, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2024.

The financial information included in these statements should be read in conjunction with the consolidated financial statements and related notes thereto as of September 30, 2023, and for the fiscal year then ended included in the Company’s Annual Report on Form 10-K, filed with the U.S.

The results of operations for the three months ended December 31, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2025.

The financial information included in these statements should be read in conjunction with the condensed consolidated financial statements and related notes thereto as of September 30, 2024 and for the fiscal year then ended included in the Company’s Annual Report on Form 10-K, filed with the U.S.

Securities and Exchange Commission (the “SEC”) on December 19, 2024 (the “2024 Form 10-K”).

3 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the prior period have been reclassified to conform to the current period presentation.

These reclassifications have no material effect on the reported financial results.

Use of Estimates

2 unchanged sentences

Actual results could differ from those estimates.

Significant estimates made in connection with the accompanying consolidated financial statements include the estimated reserve for doubtful current trade receivables, the estimated reserve for excess and obsolete inventory, fair values in connection with the analysis of goodwill, other intangibles and long-lived assets for impairment, valuation allowance against deferred tax assets, lease terminations, and estimated useful lives for intangible assets and property and equipment.

Significant estimates made in connection with the accompanying consolidated financial statements include the estimated reserve for excess and obsolete inventory, fair values in connection with the analysis of goodwill, other intangibles and long-lived assets for impairment, valuation allowance against deferred tax assets, and estimated useful lives for intangible assets.

Revenue Recognition

2 unchanged sentences

Under this model we (i) identify the contract with the customer, (ii) identify our performance obligations in the contract, (iii) determine the transaction price for the contract, (iv) allocate the transaction price to our performance obligations, and (v) recognize revenue when or as we satisfy our performance obligations.

Revenue is recognized upon transfer of control of the promised goods or the performance of the services to customers in an amount that reflects the consideration expected to be receive in exchange for those goods or services.

The Company enters into contracts that may include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations.

3 unchanged sentences

Consequently, revenue is recorded at the point in time in which the sale is made.

Revenues are recorded net of sales taxes collected from customers.

Revenue is recorded net of sales taxes collected from customers.

The Company recognizes the portion of the dollar value of prepaid stored-value products that ultimately is unredeemed (“breakage”) in accordance with ASC 606-10-32-11 through 32-13 Measurement-Constraining Estimates of Variable Consideration.

Retail - Flooring Segment

3 unchanged sentences

Installation services generally contain multiple performance obligations requiring revenue to be recognized over a period of time based on percentage of completion.

For sales that include installation, revenue is recognized upon completion of the

installation of the material in accordance with the contract, as this method is the best depiction of when the transfer of goods or services takes place.

All direct costs are either paid and or accrued for in the period in which the sale is recorded.

Revenues are recorded net of sales taxes collected from customers.

Revenue is recorded net of sales taxes collected from customers.

Flooring and Steel Manufacturing Segments

3 unchanged sentences

At the time revenue is recognized, the Company records a provision for the estimated amount of future returns based primarily on historical experience and any known trends or conditions that exist at the time revenue is recognized.

Revenues are recorded net of taxes collected from customers.

Revenue is recorded net of taxes collected from customers.

All direct costs are either paid and or accrued for in the period in which the sale is recorded.

17 unchanged sentences

The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”) which requires entities to (i) disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, (ii) include certain amounts that are already required to be disclosed under U.S.

GAAP in the same disclosures as other disaggregation requirements, (iii) disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and (iv) disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

Acquisition of Midwest Grinding

On June 10, 2024, pursuant to an Asset Purchase Agreement, Kinetic acquired certain assets and assumed certain liabilities of Midwest Grinding, a Milwaukee grinding house dedicated to precision Blanchard and specialty surface grinding of small to extra-large capacity.

Total consideration for the acquisition was $ 600,000 .

In connection with the acquisition, Kinetic also acquired the building being used in the business for $ 400,000 .

On June 10, 2024, pursuant to an asset purchase agreement, Kinetic acquired certain assets and assumed certain liabilities of Midwest Grinding Corp., a Milwaukee grinding house dedicated to precision Blanchard and specialty surface grinding of small to extra-large capacity.

Total consideration for the acquisition was $ 0.6 million.

In connection with the acquisition, Kinetic also acquired the building being used in the business for $ 0.4 million.

Total consideration for both the business and building acquisition was $ 1.0 million, paid in cash at close.

The fair value of the assets acquired and liabilities assumed are based on their estimates of fair value available as of June 10, 2024, as calculated by management.

The table below outlines the purchase price allocation of the purchase for Midwest Grinding to the acquired identifiable assets and liabilities assumed as of June 30, 2024 (in $000’s):

The table below outlines the purchase price allocation of the purchase for Midwest Grinding to the acquired identifiable assets and liabilities assumed as of December 31, 2024 (in $000’s):

Total purchase price $ 1,000

12 unchanged sentences

Acquisition of Central Steel

On May 15, 2024, Precision Marshall acquired Central Steel Fabricators (“Central Steel”), a Chicago-based manufacturer of specialized fabricated metal products primarily for data centers and the communications industry.

Total consideration for the acquisition was approximately $ 14.1 million, comprised of $ 10.7 million paid at closing, a seller note of $ 1.1 million, a holdback in the amount $ 300,000 , and contingent consideration of $ 2.0 million paid in the form of a five-year earn-out.

The consideration paid at close was funded in part by borrowings under Precision Marshall's credit facility of approximately $ 3.3 million, and proceeds from a sale and leaseback transaction, discussed below.

On May 15, 2024, Precision Marshall acquired Central Steel.

Total consideration for the acquisition was approximately $ 13.9 million, comprised of $ 10.7 million paid at closing, a seller note of $ 1.1 million, a holdback, in the amount of $ 0.3 million, and contingent consideration of $ 2.0 million paid in the form of a five-year earn-out.

The consideration paid at close was funded in part by borrowings under Precision Marshall's credit facility of approximately $ 3.3 million, and

proceeds from a sale and leaseback transaction, discussed below.

The acquisition involved no issuance of stock of the Company.

Simultaneous to the acquisition, the Company entered into a sales and leaseback transaction with Legacy West Partners, LLC, an unrelated party, for one of Central Steel's properties located in Broadview, Illinois.

The sales price for the real property subject to the sales and leaseback transaction was approximately $ 8.3 million, with total proceeds received by the Company of approximately $ 7.9 million, net of approximately $ 0.4 million in seller's fees.

Simultaneous to the acquisition, the Company entered into a sale and leaseback transaction with Legacy West Partners, LLC, an unrelated party, for one of Central Steel's properties located in Broadview, Illinois.

The sales price for the real property subject to the sale and leaseback transaction was approximately $ 8.3 million, with total proceeds received by the Company of approximately $ 7.9 million, net of approximately $ 0.4 million in seller's fees.

The lease agreement includes a 20-year lease term with two five-year renewal options.

2 unchanged sentences

Due to the highly specialized nature of the leased property, the Company currently believes it is more likely than not that each of the two five-year options will be exercised.

Consequently, because the aggregate term of the lease at its conclusion will represent approximately 75% of the

economic life of the building, the Company concluded that the lease is a financing transaction and a failed sale and leaseback transaction, as defined under ASC 842.

The proceeds, net of closing fees, from the sale and leaseback transaction were used to assist in funding the acquisition of Central Steel.

Consequently, because the aggregate term of the lease at its conclusion will represent approximately 75% of the economic life of the building, the Company concluded that the lease is a financing transaction and a failed sale and leaseback transaction, as defined under ASC 842.

The proceeds, net of closing fees, from the failed sale and leaseback transaction were used to assist in funding the acquisition of Central Steel.

No gain was recognized as a result of the sale.

5 unchanged sentences

The Company anticipates all of the goodwill arising from the acquisition to be fully deductible for tax purposes.

The table below outlines the purchase price allocation, as revised, for the purchase of Central Steel to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

The table below outlines the purchase price allocation for the purchase of Central Steel to the acquired identifiable assets, liabilities assumed, and goodwill as of December 31, 2024 (in $000’s):

Total purchase price $ 13,880

14 unchanged sentences

Total goodwill $ 2,906

Acquisition of CRO

On October 13, 2023, Flooring Liquidators acquired certain assets and assumed certain liabilities of Carpet Remnant Outlet, Inc.

(“CRO”), a floor covering retailer and installer serving residential and commercial customers throughout Northwest Arkansas.

Total consideration for the acquisition was approximately $ 1.4 million and was comprised of cash at close of approximately $ 1.0 million, an indemnification holdback amount of $ 300,000 , and additional consideration valued at $ 89,000 .

The fair value of the purchase price components was $ 1.4 million, as detailed below (in $000's):

Additional consideration 89

Purchase price $ 1,423

Under the preliminary purchase price allocation, the Company recognized goodwill of $ 89,000 , which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets

The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of October 13, 2023, as calculated by an independent third-party firm.

The value of the additional consideration was calculated by management.

During the three months ended June 30, 2024, the Company recorded a noncash fair value adjustment related to the value of the additional consideration in the amount of approximately $ 336,000 .

The Company anticipates the $ 89,000 of goodwill arising from the acquisition to be fully deductible for tax purposes.

The table below outlines the purchase price allocation of the purchase for CRO to the acquired identifiable assets, liabilities assumed and goodwill as of June 30, 2024 (in $000’s):

Total purchase price $ 1,423

Accounts payable 770

Accrued liabilities 1,298

Total liabilities assumed 2,068

Total consideration 3,491

Accounts receivable 259

Inventory 1,406

Property and equipment 261

Intangible assets 1,190

Other assets 286

Total assets acquired 3,402

Total goodwill $ 89

Acquisition of Johnson

On November 30, 2023, CRO acquired certain assets and assumed certain liabilities of Johnson Floor & Home (“Johnson”), a floor covering retailer and installer serving residential and commercial customers through four locations in the Tulsa, Oklahoma area, and one in Joplin, Missouri.

Total consideration for the acquisition was $ 2.0 million, comprised of cash at close of $ 500,000 , deferred consideration in the form of a seller note of $ 1.2 million, with additional consideration paid in the form of an earnout valued at approximately $ 300,000 .

The deferred consideration is payable in

three $ 400,000 installments due annually on the first three anniversary dates following the closing date.

On November 30, 2023, CRO Affiliated, LLC ("CRO Affiliated"), a subsidiary of Live Ventures, acquired certain assets and assumed certain liabilities of Johnson Floor & Home (“Johnson”), a floor covering retailer and installer serving residential and commercial customers through four locations in the Tulsa, Oklahoma area, and one in Joplin, Missouri.

Total consideration for the acquisition was $ 2.0 million, comprised of cash at close of $ 0.5 million, deferred consideration in the form of a seller note of $ 1.2 million, with additional consideration paid in the form of an earnout valued at approximately $ 0.3 million.

The deferred consideration is payable in three $ 0.4 million installments due annually on the first three anniversary dates following the closing date.

Each installment will accrue interest at 6.0 % per annum until paid.

3 unchanged sentences

The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of November 30, 2023, as calculated by management.

The table below outlines the purchase price allocation of the purchase for Johnson to the acquired identifiable assets and liabilities assumed as of June 30, 2024 (in $000’s):

The table below outlines the purchase price allocation of the purchase for Johnson to the acquired identifiable assets and liabilities assumed as of December 31, 2024:

Total purchase price $ 2,001

5 unchanged sentences

Inventory 1,127

Property and equipment 157

Property, plant and equipment 157

Intangible assets

5 unchanged sentences

Total goodwill $ —

On May 24, 2024, CRO entered into an asset purchase agreement with the original seller of Johnson under which the original seller agreed to purchase certain assets and assume certain obligations acquired by CRO under the original asset

purchase agreement.

Consequently, CRO recorded a loss on deconsolidation of Johnson’s assets and liabilities of approximately $ 301,000 , as detailed in the table below (in $000's):

On May 24, 2024, CRO Affiliated entered into an asset purchase agreement with the original seller of Johnson under which the original seller agreed to purchase certain assets and assume certain obligations acquired by CRO Affiliated under the

original asset purchase agreement.

Consequently, CRO Affiliated recorded a loss on disposition of Johnson’s assets and liabilities of approximately $ 0.3 million, as detailed in the table below (in $000's):

Accounts payable and accrued liabilities $ 475

10 unchanged sentences

Total deconsolidation of assets 5,016

Total loss on deconsolidation $ ( 301 )

Acquisition of Harris Flooring Group® Brands

On September 20, 2023, Marquis acquired the Harris Flooring Group® brands from Q.E.P., a designer, manufacturer, and distributor of a broad range of best-in-class flooring and installation solutions for commercial and home improvement projects.

Specifically, Marquis acquired the Harris Flooring Group brands, inventory, and book of business and intends to retain all sales representatives.

The purchase price was $ 10.1 million, consisting of $ 3.0 million in cash at close, and the recording of a deferred payment of $ 5.1 million and holdback of $ 2.0 million.

The acquisition was determined to be an asset acquisition for accounting purposes.

The entirety of the purchase price was allocated to inventory.

Acquisition of PMW

On July 20, 2023 (“Effective Date”), the Company acquired PMW, a Kentucky-based metal stamping and value-added manufacturing company.

PMW was acquired for total consideration of approximately $ 28 million, comprised of a $ 25 million purchase price, plus closing cash, and subject to working capital adjustments, with additional consideration of up to $ 3 million paid in the form of an earn-out.

The purchase price was funded in part by a $ 2.5 million seller note, borrowings under a credit facility of $ 14.4 million, and proceeds under a sale and leaseback transaction of approximately $ 8.6 million.

The acquisition involved no issuance of stock of the Company.

As of the Effective Date, the Company entered into a sales and leaseback transaction for two properties acquired, one located in Frankfort, Kentucky, and the other located in Louisville, Kentucky, with Legacy West Kentucky Portfolio, LLC (“Lessor”).

The aggregate sales price of the real estate was approximately $ 14.5 million.

The Louisville, Kentucky property was acquired on the Effective Date for $ 5.1 million in connection with an option of PMW to purchase that property.

The provisions of each of the two lease agreements include a 20-year lease term with two five-year renewal options.

The base rent under the Frankfort lease agreement is $ 34,977 per month for the first year of the term and a 2 % per annum escalator thereafter.

The base rent under the Louisville lease agreement is $ 63,493 per month for the first year of the term and a 2 % per annum escalator thereafter.

Both lease agreements are “net leases,” such that the lessees are also obligated to pay all taxes, insurance, assessments, and other costs, expenses, and obligations of ownership of the real property incurred by the lessor.

Due to the highly specialized nature of the leased assets, the Company currently believes it is more likely than not that each of the two five-year options will be exercised.

The proceeds of $ 14.5 million, net of closing fees, from the sale-leaseback were used to assist in funding the acquisition of PMW.

The fair value of the purchase price components outlined above was $ 26.8 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s):

Total loss on disposition $ ( 301 )

Acquisition of CRO

On October 13, 2023, CRO Affiliated acquired certain assets and assumed certain liabilities of Carpet Remnant Outlet, Inc.

(“CRO”), a floor covering retailer and installer serving residential and commercial customers throughout Northwest Arkansas.

Total consideration for the acquisition was approximately $ 1.4 million and was comprised of cash at close of approximately $ 1.0 million, an indemnification holdback amount of $ 0.3 million, and additional consideration valued at $ 89,000 .

The fair value of the purchase price components was $ 1.4 million, as detailed below (in $000's):

Additional consideration 89

Purchase price $ 1,423

Fair value of earnout 2,675

Cash from balance sheet 1,602

Working capital adjustment ( 2,500 )

Net purchase price $ 26,777

Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $ 4.0 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired.

The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of July 20, 2023, as calculated by an independent third-party firm.

Because the transaction was considered a stock purchase for tax purposes, none of the goodwill arising from the acquisition will be deductible for tax purposes.

During the three months ended December 31, 2023, the Company recorded noncash fair value adjustments related to inventory and other liabilities assumed, as well as an adjustment to deferred tax liabilities in the aggregate amount of $ 652,000 .

The table below outlines the purchase price allocation of the purchase for PMW to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Net purchase price $ 26,777

The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of October 13, 2023, as calculated by an independent third-party firm.

The value of the additional

consideration was calculated by management.

The Company anticipates the $ 89,000 of goodwill arising from the acquisition to be fully deductible for tax purposes.

The table below outlines the purchase price allocation of the purchase for CRO to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Total purchase price $ 1,423

Accounts payable 770

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Intangible assets

Other assets 849

Total assets acquired 38,546

Total goodwill $ 4,014

Acquisition of Cal Coast Carpets

On June 2, 2023, Flooring Liquidators acquired certain fixed assets and other intangible assets of Cal Coast Carpets, Inc.

(“Cal Coast”), and its shareholders.

No liabilities were assumed as part of either transaction.

The purchase price for the fixed assets acquired from Cal Coast was $ 35,000 , and the intangible assets acquired from the shareholders was approximately $ 1.265 million, for a total combined purchase price of $ 1.3 million.

The intangible assets acquired were comprised of customer relationships, trade name, and non-compete agreements.

The acquisition was determined to be an asset acquisition for accounting purposes and, as such, no goodwill was recorded as part of the transaction.

The values assigned to the assets acquired are based on their estimates of fair value available as of June 2, 2023, as calculated by management.

The table below outlines the purchase price allocation of the purchase for Cal Coast to the acquired identifiable assets (in $000’s):

Property and equipment $ 35

Intangible assets

Customer relationships 785

Trade name 425

Non-compete agreement 1,190

Total intangible assets 1,265

Total assets acquired $ 1,300

Acquisition of Flooring Liquidators

On January 18, 2023, Live Ventures acquired 100 % of the issued and outstanding equity interests (the “Equity Interests”) of Flooring Liquidators, Inc., Elite Builder Services, Inc.

(“EBS”), 7 Day Stone, Inc., Floorable, LLC, K2L Leasing, LLC, and SJ & K Equipment, Inc.

(collectively, the “Acquired Companies”).

The Acquired Companies are leading retailers and installers of floors, carpets, and countertops to consumers, builders and contractors in California and Nevada.

The acquisition was effected pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with an effective date of January 18, 2023 by and among the Company, and Stephen J.

Kellogg, as the seller representative of the equity holders of the Acquired Companies and individually in his capacity as an equity holder of the Acquired Companies, and the other equity holders of the Acquired Companies (collectively, the “Seller”).

The purchase price for the Equity Interests was $ 83.8 million before any fair value considerations, and is comprised of the following:

• $ 41.8 million in cash to the Seller;

• $ 34.0 million (the “Note Amount”) to certain trusts for the benefit of Kellogg and members of his family (the “Kellogg Trusts”) pursuant to the issuance by the Company of a subordinated promissory note (the “Note”) in favor of the Kellogg Trusts;

• $ 4.0 million to the Kellogg 2022 Family Irrevocable Nevada Trust by issuance of 116,441 shares of Company Common Stock (as defined in the Purchase Agreement) (the “Share Amount”), calculated in the manner described in the Purchase Agreement;

• $ 2.0 million holdback;

• $ 2.0 million of contingent consideration, comprised of $ 1.0 million in cash and $ 1.0 million in restricted stock units.

The fair value of the purchase price components outlined above was $ 78.7 million due to fair value adjustments for the Note, and restricted stock, as detailed below (in $000's).

Purchase price $ 83,800

Fair value adjustment, sellers note ( 3,300 )

Fair value adjustment, restricted stock ( 1,800 )

Net purchase price $ 78,700

Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $ 31.4 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired.

The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of January 18, 2023, as calculated by an independent third-party firm.

The Company anticipates approximately $ 13.4 million of the goodwill arising from the acquisition to be fully deductible for tax purposes.

During the three months ended December 31, 2023, the Company recorded a fair value adjustment related to its contingent

consideration of $ 1 million.

The table below outlines the purchase price allocation, as revised, of the purchase for Flooring Liquidators to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Purchase price $ 78,700

Accounts payable 5,189

Accrued liabilities 10,700

Total liabilities assumed 15,949

Total consideration 94,649

Accounts receivable 4,824

Inventory 19,402

Property and equipment 4,643

Intangible assets

Trade names $ 13,275

Customer relationships 7,700

Non-compete agreements 1,625

Subtotal intangible assets 1,190

Other assets 286

Total assets acquired 3,402

Total goodwill $ 89

Pro Forma Information

The table below presents selected proforma information for the Company for the three and nine-month periods ended June 30, 2023, assuming that the acquisition had occurred on October 1, 2022 (the beginning of the Company’s 2023 fiscal year), pursuant to ASC 805-10-50 (in $000's).

This proforma information does not purport to represent what the actual results of operations of the Company would have been had the acquisition occurred on that date, nor does it purport to predict the results of operations for future periods.

As Reported Adjustments Proforma

Live Unaudited Three Months Ended June 30, 2023 Flooring Liquidators Unaudited Three Months Ended June 30, 2023 Adjustments (1)

Live for the Three Months Ended June 30, 2023

Net revenue $ 91,516 $ 4,222 $ 95,738

Net income $ 1,060 $ ( 2,188 ) $ ( 300 ) $ ( 1,428 )

Earnings per basic common share $ 0.33 $ ( 0.45 )

Earnings per basic diluted share $ 0.33 $ ( 0.45 )

As Reported Adjustments Proforma

Live Unaudited Nine Months Ended June 30, 2023 Flooring Liquidators Unaudited Nine Months Ended June 30, 2023 Adjustments (1)

Live for the Nine Months Ended June 30, 2023

Net revenue $ 251,624 $ 37,702 $ 289,326

Net income $ 4,462 $ ( 1,033 ) $ ( 2,226 ) $ 1,203

Earnings per basic common share $ 1.43 $ 0.39

Earnings per basic diluted share $ 1.42 $ 0.38

(1) Adjustments are related to adjustments made for the following:

• Amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date.

• Interest expense has been adjusted to include proforma interest expense that would have been incurred as a result of the acquisition financing obtained by the Company.

• Elimination of revenue and costs of revenue associated with sales between Flooring Liquidators and the Company prior to acquisition.

The following table details the Company's inventory as of June 30, 2024 and September 30, 2023 (in $000's):

Inventory, net June 30, 2024 September 30, 2023

The following table details the Company's inventory as of December 31, 2024 and September 30, 2024 (in $000's):

Inventory, net December 31, 2024 September 30, 2024

Raw materials $ 41,239 $ 31,994

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Property and Equipment

The following table details the Company's property and equipment as of June 30, 2024 and September 30, 2023 (in $000's):

June 30, 2024 September 30, 2023

The following table details the Company's property and equipment as of December 31, 2024 and September 30, 2024 (in $000's):

December 31, 2024 September 30, 2024

Property and equipment, net:

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Total property and equipment, net $ 81,527 $ 82,869

Depreciation expense was $ 3.1 million and $ 2.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 9.2 million and $ 7.8 million for the nine months ended June 30, 2024 and 2023, respectively.

Depreciation expense was $ 3.2 million and $ 3.1 million for the three months ended December 31, 2024 and 2023, respectively.

The Company leases retail stores, warehouse facilities, and office space.

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The amounts recognized reflect the present value of remaining lease payments for all leases.

The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with

each subsidiary’s debt outstanding at lease commencement.

The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with each subsidiary’s debt outstanding at lease commencement.

In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate, or purchase.

Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

The following table details the Company's right of use assets and lease liabilities as of June 30, 2024 and September 30, 2023 (in $000's):

June 30, 2024 September 30, 2023

The following table details the Company's right-of-use assets and lease liabilities as of December 31, 2024 and September 30, 2024 (in $000's):

December 31, 2024 September 30, 2024

Right of use asset - operating leases $ 55,113 $ 55,701

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Long term - finance 42,200 41,677

As of June 30, 2024, the weighted average remaining lease term for operating leases is 10.5 years.

As of December 31, 2024, the weighted average remaining lease term for operating leases is 9.8 years.

The Company's weighted average discount rate for operating leases is 9.9 %.

Total cash payments for operating leases for the nine months ended June 30, 2024 and 2023 were approximately $ 13.8 million and $ 8.2 million, respectively.

Additionally, the Company recognized approximately $ 18.8 million in right of use assets and liabilities upon commencement of operating leases during the nine months ended June 30, 2024.

As of June 30, 2024, the weighted average remaining lease term for finance leases is 27.5 years.

Total cash payments for operating leases for the three months ended December 31, 2024 and 2023 were approximately $ 4.7 million and $ 4.3 million, respectively.

Additionally, the Company recognized approximately $ 3.2 million in right-of-use assets and liabilities upon commencement of operating leases during the three months ended December 31, 2024.

As of December 31, 2024, the weighted average remaining lease term for finance leases is 26.9 years.

The Company's weighted average discount rate for finance leases is 11.3 %.

Total cash payments for finance leases for the nine months ended June 30, 2024 and 2023 were approximately $ 2.5 million and $ 1.6 million, respectively.

During the nine months ended June 30, 2024, the Company recognized finance right-of-use assets and liabilities of approximately $ 7.9 million.

The Company records finance lease right-of-use assets as property and equipment.

The balance, as of June 30, 2024 and September 30, 2023 is as follows (in $000’s):

June 30, 2024 September 30, 2023

Property and equipment, at cost $ 26,226 $ 22,526

Accumulated depreciation $ ( 1,262 ) $ ( 702 )

Property and equipment, net $ 24,964 $ 21,824

Total present value of future lease payments of operating leases as of June 30, 2024 (in $000's):

Twelve months ended June 30,

Total cash payments for finance leases for the three months ended December 31, 2024 and 2023 were approximately $ 1.0 million and $ 0.8 million, respectively.

Additionally, the Company recognized approximately $ 0.6 million in right-of-use assets and liabilities upon commencement of operating leases during the three months ended December 31, 2024.

Total present value of future lease payments of operating leases as of December 31, 2024 (in $000's):

Twelve months ended December 31,

2025 $ 18,041

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Present value of payments $ 59,785

Total present value of future lease payments of finance leases as of June 30, 2024 (in $000's):

Twelve months ended June 30,

The Company records finance lease right-of-use assets as property and equipment.

The balance, as of December 31, 2024 and September 30, 2024 is as follows (in $000’s):

December 31, 2024 September 30, 2024

Property and equipment, at cost $ 27,102 $ 26,495

Accumulated depreciation $ ( 1,535 ) $ ( 1,662 )

Property and equipment, net $ 25,567 $ 24,833

Total present value of future lease payments of finance leases as of December 31, 2024 (in $000's):

Twelve months ended December 31,

Thereafter 125,077

2 unchanged sentences

Present value of payments $ 42,667

In connection with the disposition of certain of Johnson’s assets and liabilities (see Note 3), during the three months ended June 30, 2024, the Company derecognized right-of-use assets in the amount of approximately $ 2.7 million and lease liabilities in the amount of approximately $ 2.7 million.

During the nine months ended June 30, 2024 and 2023, the Company recorded no impairment charges relating to any of its leases.

The following table details the Company's intangibles as of June 30, 2024 and September 30, 2023 (in $000's):

June 30, 2024 September 30, 2023

During the three months ended December 31, 2024 and 2023, the Company recorded no impairment charges relating to any of its leases.

The following table details the Company's intangibles as of December 31, 2024 and September 30, 2024 (in $000's):

December 31, 2024 September 30, 2024

Intangible assets, net:

5 unchanged sentences

Total intangibles, net $ 23,847 $ 25,103

Amortization expense was $ 1.2 million and approximately $ 1.0 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3.7 million and $ 2.2 million for the nine months ended June 30, 2024 and 2023, respectively.

Amortization expense was $ 1.3 million and $ 1.2 million for the three months ended December 31, 2024 and 2023, respectively.

The following table summarizes estimated future amortization expense related to intangible assets that have net balances (in $000’s):

Twelve months ending June 30,

Twelve months ending December 31,

Thereafter 680

In connection with the disposition of Johnson’s assets and liabilities (see note 3), during the three months ended June 30, 2024, the Company derecognized customer relationships in the amount of approximately $ 1.2 million and other intangibles in the amount of approximately $ 0.3 million.

The following table details the Company's goodwill as of September 30, 2023 and June 30, 2024 (in $000's):

The following table details the Company's goodwill as of September 30, 2024 and December 31, 2024 (in $000's):

Retail - Entertainment Retail - Flooring Flooring Manufacturing Steel Manufacturing Total

September 30, 2024 36,947 13,451 807 9,947 61,152

CRO acquisition — 425 — — 425

Central Steel acquisition — — — 2,829 2,829

CRO adjustment — ( 336 ) — — ( 336 )

PMW adjustment — — — ( 652 ) ( 652 )

Flooring Liquidators adjustment — 1,000 — — 1,000

June 30, 2024 $ 36,947 $ 31,508 $ 807 $ 9,870 $ 79,132

During the nine months ended June 30, 2024, the Company made fair value adjustments, in the amount of approximately $ 652,000 related to the acquisition of PMW, $ 336,000 related to the CRO acquisition, and $ 1.0 million related to the acquisition of Flooring Liquidators (see Note 3).

As of June 30, 2024, the Company did not identify any triggering events that would require impairment testing.

December 31, 2024 $ 36,947 $ 13,451 $ 807 $ 9,947 $ 61,152

As of December 31, 2024, the Company did not identify any triggering events that would require impairment testing.

Accrued Liabilities

The following table details the Company's accrued liabilities as of June 30, 2024 and September 30, 2023 (in $000's):

June 30, 2024 September 30, 2023

The following table details the Company's accrued liabilities as of December 31, 2024 and September 30, 2024, (in $000's):

December 31, 2024 September 30, 2024

Accrued liabilities:

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Accrued sales and use taxes 1,610 1,326

Accrued bank overdrafts 1,025 —

Accrued customer deposits 3,960 4,675

Accrued gift card and escheatment liability 1,845 1,819

Accrued gift card liability 2,066 1,986

Accrued interest payable 370 840

4 unchanged sentences

Long-Term Debt

Long-term debt as of June 30, 2024 and September 30, 2023 consisted of the following (in $000's):

June 30, 2024 September 30, 2023

Long-term debt as of December 31, 2024 and September 30, 2024 consisted of the following (in $000's):

December 31, 2024 September 30, 2024

Revolver loans $ 57,078 $ 60,199

7 unchanged sentences

Total long-term debt $ 54,339 $ 54,994

Future maturities of long-term debt at June 30, 2024, are as follows which does not include related party debt separately stated (in $000's):

Twelve months ending June 30,

Future maturities of long-term debt at December 31, 2024, are as follows which does not include related party debt separately stated (in $000's):

Twelve months ending December 31,

2025 $ 39,595

2 unchanged sentences

Bank of America Revolver Loan

On January 31, 2020, Marquis entered into an amended $ 25.0 million revolving credit agreement (“BofA Revolver”) with Bank of America Corporation (“BofA”).

The BofA Revolver is a five-year , asset-based facility that is secured by substantially all of Marquis’ assets.

Availability under the BofA Revolver is subject to a monthly borrowing base calculation.

On January 31, 2020, as amended on September 4, 2024, Marquis entered into an amended $ 25.0 million revolving credit agreement (“BofA Revolver”) with Bank of America Corporation (“BofA”).

The BofA Revolver is an asset-based facility that is secured by substantially all of Marquis’ assets.

Availability under the BofA Revolver is subject to a monthly

borrowing base calculation.

Marquis’ ability to borrow under the BofA Revolver is subject to the satisfaction of certain conditions, including meeting all loan covenants under the credit agreement with BofA.

The BofA Revolver has a variable interest rate and matures in January 2025.

As of June 30, 2024 and September 30, 2023, the outstanding balance was approximately $ 13.7 million and $ 6.1 million, respectively.

The BofA Revolver has a variable interest rate and matures in July 2025.

As of December 31, 2024 and September 30, 2024, the outstanding balance was approximately $ 16.0 million and $ 17.6 million, respectively.

Loan with Fifth Third Bank (Precision Marshall)

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The refinanced credit facility, totaling $ 29 million, is comprised of $ 23.0 million in revolving credit, $ 3.5 million in M&E lending, and $ 2.5 million for Capex lending.

Advances under the new credit facility will bear interest at the 30-day SOFR plus 200 basis points for lending under the revolving facility, and 30-day SOFR plus 225 basis points for M&E and Capex lending.

Advances under the new credit facility will bear interest at Prime Rate plus 0 basis points for lending under the revolving facility, and Prime Rate plus 25 basis points for M&E and Capex lending.

The refinancing of the Borrower’s existing credit facility reduces interest costs and improves the availability and liquidity of funds by approximately $ 3.0 million at the close.

The facility terminates on January 20, 2027, unless terminated earlier in accordance with its terms.

In connection with the acquisitions of Kinetic and Central Steel, the existing revolving facility was amended to add Kinetic and Central Steel as borrowers.

In connection with the acquisitions of Kinetic and Central Steel (see Note 3), the existing revolving facility was amended to add Kinetic and Central Steel as a borrowers.

In addition, two additional term loans were executed to fund the purchase of Kinetic.

1 unchanged sentence

The $ 4.0 million term loan (“Kinetic Term Loan #1”), which matures on January 20, 2027, bears interest on the same terms as for M&E term lending as stated above.

The $ 1.0 million term loan (“Kinetic Term Loan #2”), which matures on June 28, 2025 , is a “Special Advance Term Loan”, and bears interest at SOFR plus 375 basis points.

As of June 30, 2024 and September 30, 2023, the outstanding balance on the revolving loan was approximately $ 22.8 million and $ 23.0 million, respectively, and the outstanding balance on the original M&E lending, which is documented as a term note, was approximately $ 2.0 million and $ 2.3 million, respectively.

As of December 31, 2024 and September 30, 2024, the outstanding balance on the revolving loan was approximately $ 22.3 million and $ 21.3 million, respectively, and the outstanding balance on the original M&E lending, which is documented as a term note, was approximately $ 1.7 million and $ 1.8 million, respectively.

The revolving loan has a variable interest rate and matures in January 2027.

As of June 30, 2024 and September 30, 2023, the outstanding balance on Kinetic Term Loan #1 was approximately $ 2.9 million and $ 3.3 million, respectively.

As of September 30, 2023, the Kinetic Term Loan #2 was fully repaid.

As of December 31, 2024 and September 30, 2024, the outstanding balance on Kinetic Term Loan #1 was approximately $ 2.6 million and $ 2.7 million, respectively.

On April 12, 2023, in connection with its existing credit facility with Fifth Third Bank, Precision Marshall took an advance against its Capex term lending in the amount of approximately $ 1.4 million.

1 unchanged sentence

The loan matures January 2027 and bears interest on the same terms as for Capex lending as stated above.

As of June 30, 2024 and September 30, 2023, the outstanding balance on the Capex loan was approximately $ 1.7 million and 1.4 million, respectively.

The first payment under this loan is due in February 2024.

As of December 31, 2024 and September 30, 2024, the outstanding balance on the Capex loan was $ 1.5 million and $ 1.6 million, respectively.

Eclipse Business Capital Loans

In connection with the acquisition of Flooring Liquidators (see Note 3), on January 18, 2023, Flooring Liquidators entered into a credit facility with Eclipse Business Capital, LLC (“Eclipse”).

In connection with the acquisition of Flooring Liquidators, on January 18, 2023, Flooring Liquidators entered into a credit facility with Eclipse Business Capital, LLC (“Eclipse”).

The facility consists of $ 25.0 million in revolving credit (“Eclipse Revolver”) and $ 3.5 million in M&E lending (“Eclipse M&E”).

2 unchanged sentences

Flooring Liquidators’ ability to borrow under the Eclipse Revolver is subject to the satisfaction of certain conditions, including meeting all loan covenants under the credit agreement with Eclipse.

The Eclipse Revolver bears interest at 4.5 % per annum in excess of Adjusted Term SOFR prior to April 1, 2023, and 3.5 % per annum in excess of Adjusted Term SOFR after April 1, 2023.

The Eclipse Revolver bears interest at 3.5 % per annum in excess of Adjusted Term SOFR.

The Eclipse M&E loan bears interest at 6.0 % per annum in excess of Adjusted Term SOFR prior to April 1, 2023, and 5.0 % per annum in excess of Adjusted Term SOFR after April 1, 2023.

The credit facility matures in January 2026.

As of June 30, 2024 and September 30, 2023, the outstanding balance on the Eclipse Revolver was approximately $ 9.3 million and $ 8.2 million, respectively, and the outstanding balance on the Eclipse M&E loan was approximately $ 1.9 million and $ 2.4 million, respectively.

As of December 31, 2024 and September 30, 2024, the outstanding balance on the Eclipse Revolver was approximately $ 9.1 million and $ 9.3 million, respectively, and the outstanding balance on the Eclipse M&E loan was approximately $ 1.6 million and $ 1.8 million, respectively.

Loan with Fifth Third Bank (PMW)

In connection with the acquisition of PMW (see Note 3), on July 20, 2023, PMW entered into a revolving credit facility with Fifth Third Bank (the "Revolving Credit Facility").

The facility consists of $ 15.0 million in revolving credit ("Fifth Third Revolver") and approximately $ 5.0 million in M&E lending (the "Fifth Third M&E Loan").

In connection with the acquisition of PMW, on July 20, 2023, PMW entered into a revolving credit facility (the “Revolving Credit Facility”) with Fifth Third Bank.

The facility consists of $ 15.0 million in revolving credit (the “Fifth Third Revolver”) and approximately $ 5.0 million in M&E lending (the “Fifth Third M&E Loan”).

The Fifth Third Revolver is a three-year , asset-based facility that is secured by substantially all of PMW's assets.

2 unchanged sentences

Loans made under the Revolving Credit Facility are considered Reference Rate Loans, and bear interest at a rate equal to the sum of the Reference Rate plus the Applicable Margin.

Reference Rate means the greater of (a) 3.0 % or (b) the Lender’s publicly announced prime rate (which is not intended to be Lender’s lowest or most favorable rate in effect at any time) in effect from time to time.

The Applicable Margin for revolving loans is zero , while for the M&E Term Loan or any Capital Expenditure Term Loan, it is 50 basis points ( 0.5 %).

Reference Rate means the greater of (a) 3.0 % or (b) the Lender’s publicly announced prime rate (which is not intended to be Lender’s lowest or most favorable rate in effect at any

time) in effect from time to time.

The Applicable Margin for revolving loans is zero , while for the Fifth Third M&E Loan or any Capital Expenditure Term Loan, it is 50 basis points ( 0.5 %).

The credit facility matures in July 2026.

As of June 30, 2024, the Company concluded that PMW was in default of its Fixed Cost Coverage Ratio (“FCCR”) covenant, as specified in the credit agreement governing the Revolving Credit Facility.

As of December 31, 2024, the Company concluded that PMW was in default of its Fixed Cost Coverage Ratio (“FCCR”) covenant, as specified in the credit agreement governing the Revolving Credit Facility.

This default provides the creditor rights to accelerate and made immediately due the borrowings under the Revolving Credit Facility and Fifth Third M&E Loan.

As of the date of the filing of this 10-Q, Fifth Third Bank has not exercised these rights and management is actively working with Fifth Third Bank to resolve the default.

As such, as of June 30, 2024, PMW’s long-term debt balances, in the amount of approximately $ 15.1 million, have been reclassified to current liabilities.

As of June 30, 2024 and September 30, 2023, the outstanding balance on the Revolving Credit Facility was approximately $ 11.2 million and $ 11.0 million, respectively, and the balance on the Fifth Third M&E loan was approximately $ 4.3 million and $ 4.8 million, respectively.

As such, as of December 31, 2024 and September 30, 2024, PMW’s long-term debt balances, in the amount of approximately $ 13.0 million and $ 14.4 million, respectively, have been reclassified to current liabilities.

As of December 31, 2024 and September 30, 2024, the outstanding balance on the Fifth Third Revolver was approximately $ 9.7 million and $ 10.1 million, respectively, and the balance on the Fifth Third M&E Loan was approximately $ 3.9 million and $ 4.1 million, respectively.

Bank Midwest Revolver Loan

On October 17, 2023, Vintage entered into a $ 15.0 million credit agreement with Bank Midwest (“Bank Midwest Revolver”), replacing a revolving credit facility between Vintage and Texas Capital Bank (“TCB Revolver”), which was entered into in November 2016 and set to mature in November 2023.

In connection with the entry into the Credit Agreement, the revolving credit facility between Vintage Stock and Texas Capital Bank was terminated and the balance outstanding was repaid.

The Bank Midwest Revolver interest accrues daily on the outstanding principal at a rate of the greater of (a) the one-month forward-looking term rate based on SOFR, plus 2.36 % per annum, or (b) 6.5 % per annum, and

matures on October 17, 2024.

As of June 30, 2024, the outstanding balance on the Bank Midwest Revolver was approximately $ 1.7 million.

As of September 30, 2023, the outstanding balance on the TCB Revolver was approximately $ 5.3 million.

On October 17, 2024, Vintage entered into an amended $ 10.0 million credit agreement with Bank Midwest (“Bank Midwest Revolver”).

The amended Bank Midwest Revolver accrues interest daily on the outstanding principal at a rate of the greater of (a) the one-month forward-looking term rate based on SOFR, plus 2.36 % per annum, or (b) 5.0 % per annum, and matures on October 17, 2025.

As of December 31, 2024 and September 30, 2024 the outstanding on the Bank Midwest Revolver was approximately $ 0 and $ 1.9 million, respectively.

Note payable to JCM Holdings

During October 2020, Marquis purchased a manufacturing facility, which it had previously leased, for approximately $ 2.5 million.

Marquis entered into a $ 2.0 million loan agreement, secured by the facility, with the seller of the facility, in order to complete the purchase of the facility.

The loan bears interest at 6 %, due monthly, and matures January 2030.

As of December 31, 2024 and September 30, 2024, the outstanding principal balance was approximately $ 1.2 million and $ 1.3 million, respectively.

Note Payable to Store Capital Acquisitions, LLC

On June 14, 2016, Marquis entered into a transaction with Store Capital Acquisitions, LLC.

The transaction included a sale-leaseback of land owned by Marquis and a loan secured by the improvements on such land.

The total aggregate proceeds received from the sale of the land and the loan was $ 10.0 million, which consisted of approximately $ 644,000 from the sale of the land and a note payable of approximately $ 9.4 million.

In connection with the transaction, Marquis entered into a lease with a 15 -year term commencing on the closing of the transaction, which provides Marquis with an option to extend the lease upon the expiration of its term.

The initial annual lease rate is $ 60,000 .

The proceeds from this transaction were used to pay down the BofA Revolver and Term loans, and related party loan, as well as to purchase a building from the previous owners of Marquis that was not purchased in the July 2015 transaction.

The note payable bears interest at 9.3 % per annum, with principal and interest due monthly.

The note payable matures June 13, 2056.

For the first five years of the note payable, there is a pre-payment penalty of 5 %, which declines by 1 % for each year the loan remains unpaid for the next five years .

At the end of ten years , there is no pre-payment penalty.

In connection with the note payable, Marquis incurred approximately $ 458,000 in transaction costs that are being recognized as a debt issuance cost and are being amortized and recorded as interest expense over the term of the note payable.

The remaining principal balance was approximately $ 9.1 million as of December 31, 2024 and September 30, 2024, respectively.

Equipment Loans

On June 20, 2016 and August 5, 2016, Marquis entered into a transaction that provided for a master agreement and separate loan schedules (the “Equipment Loans”) with Banc of America Leasing & Capital, LLC that provided for the following as of June 30, 2024:

Note #3 was for approximately $ 3.7 million, secured by equipment.

The Equipment Loan #3 matured in December 2023.

As of June 30, 2024 and September 30, 2023, the balance was $ 0 and $ 154,000 , respectively.

Note #4 was for approximately $ 1.1 million, secured by equipment.

The Equipment Loan #4 matured in December 2023.

As of June 30, 2024 and September 30, 2023, the balance was $ 0 and $ 47,000 , respectively.

Note #5 is for approximately $ 4.0 million, secured by equipment.

The Equipment Loan #5 is due December 2024, payable in 84 monthly payments of $ 55,000 beginning January 2018, bearing interest at 4.7 % per annum.

As of June 30, 2024 and September 30, 2023, the balance was approximately $ 325,000 and $ 799,000 , respectively.

Note #6 is for $ 913,000 , secured by equipment.

The Equipment Loan #6 is due July 2024, payable in 60 monthly payments of $ 14,000 beginning August 2019, with a final payment of $ 197,000 , bearing interest at 4.7 % per annum.

As of June 30, 2024 and September 30, 2023, the balance was approximately $ 196,000 and $ 317,000 , respectively.

As of December 31, 2024 and September 30, 2024, the balance was approximately $ 0 and $ 164,000 , respectively.

Note #7 is for $ 5.0 million, secured by equipment.

The Equipment Loan #7 is due February 2027, payable in 84 monthly payments of $ 59,000 beginning March 2020, with the final payment of $ 809,000 , bearing interest at 3.2 % per annum.

As of June 30, 2024 and September 30, 2023, the balance was approximately $ 2.5 million and $ 2.9 million, respectively.

As of December 31, 2024 and September 30, 2024, the balance was approximately $ 2.2 million and $ 2.3 million, respectively.

Note #8 is for approximately $ 3.4 million, secured by equipment.

The Equipment Loan #8 is due September 2027, payable in 84 monthly payments of $ 46,000 beginning October 2020, bearing interest at 4.0 %.

As of June 30, 2024 and September 30, 2023, the balance was approximately $ 1.7 million and $ 2.0 million, respectively.

As of December 31, 2024 and September 30, 2024, the balance was approximately $ 1.4 million and $ 1.6 million, respectively.

In December 2021, Marquis funded the acquisition of $ 5.5 million of new equipment under Note #9 of its master agreement.

The Equipment Loan #9, which is secured by the equipment, matures December 2026, and is payable in 60 monthly payments of $ 92,000 beginning January 2022, with the final payment in the amount of approximately $ 642,000 , bearing interest at 3.75 % per annum.

As of June 30, 2024 and September 30, 2023, the balance was approximately $ 3.1 million and $ 3.9 million, respectively.

As of December 31, 2024 and September 30, 2024, the balance was approximately $ 2.6 million and $ 2.9 million, respectively.

In December 2022, Marquis funded the acquisition of $ 5.7 million of new equipment under Note #10 of its master agreement.

The Equipment Loan #10, which is secured by the equipment, matures December 2029, and is payable in 84 monthly payments of $ 79,000 , beginning January 2023, with the final payment in the amount of approximately $ 650,000 , bearing interest at 6.50 %.

As of June 30, 2024 and September 30, 2023, the balance was approximately $ 4.8 million and $ 5.3 million.

As of December 31, 2024 and September 30, 2024, the balance was approximately $ 4.5 million and $ 4.6 million, respectively.

Loan Covenant Compliance

As of June 30, 2024, the Company and its subsidiaries were in compliance with all covenants under their respective existing revolving and other loan agreements, with the exception of PMW which was in default under its Revolving Credit Facility and Fifth Third M&E Loan with Fifth Third Bank, as discussed above.

As of December 31, 2024, the Company was in compliance with all covenants under its existing revolving and other loan agreements, with the exception of PMW, which was in default under its Revolving Credit Facility and Fifth Third M&E Loan with Fifth Third Bank, as discussed above.

Notes Payable-Related Parties

Long-term debt payable to related parties (see Note 16) as of June 30, 2024 and September 30, 2023 consisted of the following (in $000's):

June 30, 2024 September 30, 2023

Long-term debt payable to related parties (see Note 16) as of December 31, 2024 and September 30, 2024 consisted of the following (in $000's):

December 31, 2024 September 30, 2024

Isaac Capital Group, LLC, 12.5 % interest rate, matures May 2025

$ 2,000 $ 2,000

Isaac Capital Group, LLC, 12.0 % interest rate, matures December 2029

Spriggs Investments, LLC, 12.0 % interest rate, matures July 2025

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Total notes payable - related parties 15,314 11,400

unamortized debt issuance costs ( 71 ) ( 86 )

unamortized debt discount ( 773 ) ( 66 )

Net amount 14,541 11,334

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Total long-term portion, related parties $ 6,871 $ 4,934

Twelve months ending June 30,

Future maturities of notes to related parties at December 31, 2024 are as follows (in $000’s):

Twelve months ending December 31,

Total future maturities of long-term debt, related parties $ 14,541

Related Party Seller Notes

Seller notes as of June 30, 2024 and September 30, 2023 consisted of the following (in $000’s):

Seller notes as of December 31, 2024 and September 30, 2024 consisted of the following (in $000’s):

2024 September 30,

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Long-term portion of Related party seller notes payable $ 41,119 $ 40,361

Future maturities of seller notes at June 30, 2024 are as follows (in $000’s):

Twelve months ending June 30,

Future maturities of seller notes at December 31, 2024 are as follows (in $000’s):

Twelve months ending December 31,

Total $ 41,119

Note Payable to the Seller of Kinetic

In connection with the purchase of Kinetic, on June 28, 2022, Kinetic entered into an employment agreement with the previous owner of Kinetic to serve as its Head of Equipment Operations.

The employment agreement is for an initial term of five years and shall be automatically extended in 90 -day increments unless either party provides notice as required under the agreement.

Additionally, Precision Marshall entered into a seller financed loan in the amount of $ 3.0 million with the previous owner of Kinetic.

The Seller Subordinated Acquisition Note bears interest at 7.0 % per annum, with interest payable quarterly in arrears (the "Seller Subordinated Acquisition Note").

The Seller Subordinated Acquisition Note has a maturity date of September 27, 2027.

As of June 30, 2024 and September 30, 2023, the remaining principal balance was $ 3.0 million.

Flooring Liquidators

In connection with the purchase of Flooring Liquidators (see Note 3), on January 18, 2023, the Company entered into an employment agreement with the previous owner of Flooring Liquidators to serve as its Chief Executive Officer.

Additionally, Precision Marshall entered into a seller financed loan in the amount of $ 3.0 million with the previous owner of Kinetic (the "Seller Subordinated Acquisition Note").

The Seller Subordinated Acquisition Note bears interest at 7.0 % per annum, with interest payable quarterly in arrears, and has a maturity date of September 27, 2027.

As of December 31, 2024 and September 30, 2024, the remaining principal balance was $ 3.0 million.

Note Payable to the Seller of Flooring Liquidators

In connection with the purchase of Flooring Liquidators, on January 18, 2023, the Company entered into an employment agreement with the previous owner of Flooring Liquidators to serve as its Chief Executive Officer.

The employment agreement is for an initial term of five years and shall be automatically extended in 90-day increments unless either party provides notice as required under the agreement.

Additionally, the Company entered into a seller financed mezzanine loan (the "Seller Note"), which is fully guaranteed by the Company, in the amount of $ 34.0 million with the previous owners of Flooring Liquidators.

The Seller Note bears interest at 8.24 % per annum, with interest payable monthly in arrears beginning on January 18, 2024.

The Seller Note bears interest at the contractual rate of 8.24 % per annum, with interest payable monthly in arrears beginning on January 18, 2024.

The Seller Note has a maturity date of January 18, 2028.

The fair value assigned to the Selles Note, as calculated by an independent third-party firm, was $ 31.7 million, or a discount of $ 2.3 million.

The $ 2.3 million discount is being accreted to interest expense, using the effective interest rate method, as required by GAAP, over the term of the Seller Note.

As of June 30, 2024 and September 30, 2023, the carrying value of the Seller Note was approximately $ 35.4 million and $ 33.5 million, respectively.

In connection with the purchase of PMW (see Note 3), on July 20, 2023, the Company entered into a consulting agreement with the previous owner of PMW to serve as its part-time President and Chief Executive Officer .

The fair value assigned to the Sellers Note, as calculated by an independent third-party firm, was $ 31.7 million, or a discount of $ 2.3 million.

The $ 2.3 million discount is being accreted to interest expense, using the effective interest rate method, as required by U.S.

GAAP, over the term of the Seller Note.

As of December 31, 2024 and September 30, 2024, the carrying value of the Seller Note was approximately $ 37.0 million and $ 36.3 million, respectively.

Notes Payable to the Sellers of PMW

In connection with the purchase of PMW, on July 20, 2023, the Company entered into a consulting agreement with the previous owner of PMW to serve as its part-time President and Chief Executive Officer.

The consulting agreement shall terminate upon the later of (i) sellers’ receipt of earn-out payments in an aggregate amount equal to $ 3.0 million and (ii) the full satisfaction and payment of all amounts due and to that are to become due under the seller note, unless earlier terminated in accordance with the terms set forth in the consulting agreement.

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The Seller Financed Loans bear interest at 8.0 % per annum, with interest payable quarterly in arrears.

The Seller Financed Loans stipulate that payment of the notes will be due and payable upon any event of default under the Revolving Credit Facility, and the Live Ventures Incorporated guarantee shall go into effect.

Consequently, as of June 30, 2024, the balances on the Seller Financed Loans, in the amount of $ 2.5 million in the aggregate, have been reclassified to current liabilities.

The Company is in the process of resolving the default with Fifth Third Bank.

The Seller Financed Loans have a maturity date of July 18, 2028.

As of June 30, 2024 and September 30, 2023, the carrying value of the seller financed loans was approximately $ 2.5 million.

Central Steel

In connection with the purchase of Central Steel, on May 15, 2024, Precision Marshall entered into an employment agreement with the previous owner of Central Steel to serve as its President.

The employment agreement is for an initial term of two years and shall be automatically extended in 90 -day increments unless either party provides notice as required under the agreement.

As of September 30, 2024, the Company concluded that PMW was in default of its FCCR covenant, as specified in the credit agreement governing the Revolving Credit Facility, and the balances on the Seller Financed Loans, in the amount of $ 2.5 million in the aggregate, were classified as current liabilities (see Note 10).

On December 24, 2024, the Company entered into a Settlement Agreement and Release (“Settlement Agreement”) to settle the Seller Financed Loans of $ 2.5 million, plus accrued interest of approximately $ 0.1 million, for approximately $ 1.9 million with the previous owners of PMW.

The funds to settle the loans were borrowed from Isaac Capital Group, LLC (“ICG”) (see Note 16).

The Company evaluated this transaction under ASC 470-50 “ Debt - Modification and Extinguishment”, and concluded that, because PMW was legally released as the primary obligor, and has no other debt with these lenders, this transaction should be accounted for as a debt extinguishment.

As such, the Company recorded a gain on extinguishment of debt in the amount of approximately $ 0.7 million.

Additionally, under the Settlement Agreement, the Company was released of claims for earnout payments, as stipulated under the Stock Purchase Agreement.

Consequently, the Company recorded a gain on settlement of the earnout liability in the amount of approximately $ 2.8 million.

As of December 31, 2024 and September 30, 2024, the carrying value of the seller financed loans was approximately $ 0 million and $ 2.5 million, respectively.

Note Payable to the Seller of Central Steel

In connection with the purchase of Central Steel, on May 15, 2024 (see Note 3), Precision Marshall entered into an employment agreement with the previous owner of Central Steel to serve as its President.

The employment agreement is for an initial term of two years and shall be deemed to be automatically extended, upon the same terms and conditions, for a period of one year , unless either party provides written notice of its or his intention not to extend the term at least 90 days prior to the end of the initial term.

Additionally, Precision Marshall entered into a seller financed loan in the amount of $ 1.1 million with the previous owner of Central Steel (the "Sellers Subordinated Promissory Note").

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The Sellers Subordinated Promissory Note has a maturity date of May 15, 2029.

As of June 30, 2024, the remaining principal balance was $ 1.1 million.

As of December 31, 2024 and September 30, 2024, the remaining principal balance was $ 1.1 million.

Stockholders’ Equity

Series E Convertible Preferred Stock

As of June 30, 2024 and September 30, 2023, there were 47,840 shares of Series E Convertible Preferred Stock issued and outstanding, respectively.

As of December 31, 2024 and September 30, 2024, there were 47,840 shares of Series E Convertible Preferred Stock issued and outstanding, respectively.

Treasury Stock

As of June 30, 2024 and September 30, 2023, the Company had 694,414 and 660,063 shares of Treasury Stock, respectively.

During the nine months ended June 30, 2024 and 2023, the Company repurchased 34,351 and 38,990 shares of its common stock for approximately $ 862,000 and $ 988,000 , respectively.

During the nine months ended June 30, 2024 and 2023, the average price paid per share was $ 25.09 and $ 25.35 , respectively.

As of December 31, 2024 and September 30, 2024, the Company had 710,373 and 694,687 shares of Treasury Stock, respectively.

During the three months ended December 31, 2024 and 2023, the Company repurchased 15,686 and 4,346 shares of its common stock for approximately $ 157,000 and $ 107,000 , respectively.

During the three months ended December 31, 2024 and 2023, the average price paid per share was $ 10.01 and $ 24.51 , respectively.

Stock-Based Compensation

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The value of each award is amortized on a straight-line basis over the requisite service period.

The following table summarizes stock option activity for the fiscal year ended September 30, 2023 and the nine months ended June 30, 2024:

The following table summarizes stock option activity for the fiscal year ended September 30, 2024 and the three months ended December 31, 2024:

Shares Weighted

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Outstanding at September 30, 2023 53,750 $ 21.51 1.54 $ 540

Granted 17,500 $ 35.00

Exercised ( 31,250 ) $ 14.64

Outstanding at June 30, 2023 73,750 $ 24.42 1.38 $ 762

Exercisable at June 30, 2023 73,750 $ 24.42 1.38 $ 762

Outstanding at December 31, 2023 53,750 $ 21.51 1.29 $ 450

Exercisable at December 31, 2023 53,750 $ 21.51 1.29 $ 450

Outstanding at September 30, 2024 60,000 $ 26.04 1.29 $ 130

Granted 17,500 $ 40.00

Exercised ( 6,250 ) $ 15.00

Forfeited ( 35,000 ) $ 37.50

Outstanding at June 30, 2024 60,000 $ 26.04 1.54 $ 317

Exercisable at June 30, 2024 60,000 $ 26.04 1.54 $ 317

The Company recognized compensation expense of approximately $ 175,000 and $ 287,000 during the three months ended June 30, 2024 and 2023, respectively, and approximately $ 275,000 and $ 396,000 during the nine months ended June 30, 2024 and 2023, respectively, related to stock option awards and restricted stock awards granted to certain employees and officers based on the grant date fair value of the awards, and the revaluation for existing options whereby the expiration date was extended.

As of June 30, 2024, the Company had no unrecognized compensation expense associated with stock option awards.

Outstanding at December 31, 2024 25,000 $ 10.00 0.04 $ —

Exercisable at December 31, 2024 25,000 $ 10.00 0.04 $ —

The Company recognized compensation expense of approximately $ 51,000 and $ 50,000 during the three months ended December 31, 2024 and 2023, respectively, related to stock option awards and restricted stock awards granted to certain employees and officers based on the grant date fair value of the awards, and the revaluation for existing options whereby the expiration date was extended.

As of December 31, 2024, the Company had no unrecognized compensation expense associated with stock option awards.

Earnings Per Share

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The following table presents the computation of basic and diluted net earnings per share (in $000's):

Three Months Ended June 30, Nine Months Ended June 30,

2024 2023 2024 2023

Net (loss) income $ ( 2,855 ) $ 1,060 $ ( 6,818 ) $ 4,462

preferred stock dividends — — — —

Net (loss) income applicable to common stock $ ( 2,855 ) $ 1,060 $ ( 6,818 ) $ 4,462

Three Months Ended December 31,

Net income (loss) $ 492 $ ( 682 )

Weighted average common shares outstanding 3,124,581 3,163,541

Basic (loss) earnings per share $ ( 0.91 ) $ 0.33 $ ( 2.16 ) $ 1.43

Net (loss) income applicable to common stock $ ( 2,855 ) $ 1,060 $ ( 6,818 ) $ 4,462

preferred stock dividends — — — —

Net (loss) income applicable to diluted earnings per share $ ( 2,855 ) $ 1,060 $ ( 6,818 ) $ 4,462

Basic earnings (loss) per share $ 0.16 $ ( 0.22 )

Net income (loss) applicable to common stock $ 492 $ ( 682 )

Weighted average common shares outstanding 3,124,581 3,163,541

Options — 19,823 — 20,218

Series E Preferred Stock 239 —

Assumed weighted average common shares outstanding 3,124,820 3,163,541

Diluted (loss) earnings per share $ ( 0.91 ) $ 0.33 $ ( 2.16 ) $ 1.42

Diluted earnings (loss) per share $ 0.16 $ ( 0.22 )

Basic earnings per common share ("EPS") is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period.

Diluted EPS is computed by dividing net income by the sum of the weighted average number of shares of Common Stock outstanding and the effect of dilutive securities.

No diluted EPS computation was made for the three and nine months ended June 30, 2024, as the Company recorded a net loss.

Had the Company calculated diluted EPS for the three and nine months ended June 30, 2024, the total assumed weighted average common shares outstanding would have been 3,155,546 and 3,168,619 , respectively, and there would have been 35,000 options to purchase shares of common stock that were anti-dilutive.

For the three and nine months ended June 30, 2023, there were 38,500 options to purchase shares of common stock that were anti-dilutive, and not included in the diluted EPS computation.

No diluted EPS computation was made for the three months ended December 31, 2023, as the Company recorded a net loss.

Had the Company

calculated diluted EPS for the three months ended December 31, 2023, the total assumed weighted average common shares outstanding would have been 3,182,083 , and there would have been 17,000 options to purchase shares of common stock that were anti-dilutive, and not included in the diluted EPS computation.

Related Party Transactions

Transactions with Isaac Capital Group, LLC

As of June 30, 2024, Isaac Capital Group, LLC (“ICG”) beneficially owns 49.3 % of the Company’s issued and outstanding capital stock.

As of December 31, 2024, ICG beneficially owns 49.5 % of the Company’s issued and outstanding capital stock.

Jon Isaac, the Company's President and Chief Executive Officer, is the President and sole member of ICG, and, accordingly, has sole voting and dispositive power with respect to these shares.

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During 2015, Marquis entered into a mezzanine loan in the amount of up to $ 7.0 million (the “ICF Loan”) with Isaac Capital Fund I, LLC (“ICF”), a private lender whose managing member is Jon Isaac.

On July 10, 2020, (i) ICF released and discharged Marquis from all obligations under the loan, (ii) ICF assigned all of its rights and obligations under the instruments, documents, and agreements with respect to the ICF Loan to ICG, of which Jon Isaac, the Company’s President and Chief Executive Officer, is the sole member, and (iii) Live Ventures borrowed

$ 2.0 million (the “ICG Loan”) from ICG.

The ICG Loan bears interest at 12.5 % and matures in May 2025.

As of June 30, 2024 and September 30, 2023, the outstanding balance on this note was $ 2.0 million.

As of December 31, 2024 and September 30, 2024, the outstanding balance on this note was $ 2.0 million.

ICG Revolving Promissory Note

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No other terms of the Note were changed.

On April 1, 2023, the Company entered into the Second Amendment of the ICG Revolver that extended the maturity date to April 8, 2024, increased the interest rate from 10 % to 12 % per annum, and decreased the amount of available revolving credit under the facility to $ 1.0 million.

On April 1, 2023, the Company entered into the First Amendment of the ICG Revolver that extended the maturity date to April 8, 2024 and increased the interest rate from 10 % to 12 % per annum, and decreased the amount of available revolving credit under the facility to $ 1.0 million.

On January 11, 2024, the Company entered into the Third Amendment of the ICG Revolver that extended the maturity date to April 8, 2025 and increased the amount of available revolving credit under the facility to $ 5.0 million.

As of June 30, 2024 and September 30, 2023, the outstanding balance on the ICG Revolver was $ 2.3 million and 1.0 million, respectively.

As of December 31, 2024 and September 30, 2024, the outstanding balance on the ICG Revolver was $ 4.2 million and $ 2.6 million, respectively.

ICG Flooring Liquidators Note

On January 18, 2023, in connection with the acquisition of Flooring Liquidators, Flooring Affiliated Holdings, LLC, a wholly-owned subsidiary of the Company, as borrower, entered into a promissory note for the benefit of ICG in the amount of $ 5.0 million (“ICG Flooring Liquidators Loan”).

The ICG Flooring Liquidators Loan matures on January 18, 2028, and bears interest at 12 %.

The ICG Flooring Liquidators Loan matures on January 18, 2028, and bears interest at 12 % per annum.

Interest is payable in arrears on the last day of each calendar month.

The note is fully guaranteed by the Company.

As of June 30, 2024 and September 30, 2023, the outstanding balance on this note was $ 5.0 million.

Transactions with JanOne Inc.

Tony Isaac, a member of the Company's board of directors, and father of the Company's Chief Executive Officer, Jon Isaac, is the Chief Executive Officer and a director of JanOne Inc.

Richard Butler, a member of the Company's board of directors, is a director of JanOne.

Lease Agreement

Customer Connexx LLC, formerly a subsidiary of JanOne, previously rented approximately 9,900 square feet of office space from the Company at its Las Vegas office, which totals 16,500 square feet.

JanOne paid the Company $ 35,000 and $ 55,000 in rent and other reimbursed expenses for three months ended June 30, 2024 and 2023, respectively, and $ 109,000 and $ 160,000 for the nine months ended June 30, 2024 and 2023, respectively.

Purchase Agreement with ARCA Recycling

On April 5, 2022, the Company entered into a Purchasing Agreement with ARCA Recycling, Inc.

("ARCA"), which was a wholly owned subsidiary of JanOne until March 2023.

Pursuant to the agreement, the Company agreed to purchase inventory from time to time for ARCA as set forth in submitted purchase orders.

The inventory is owned by the Company until ARCA installs it in customer's homes, and payment by ARCA to the Company is due upon ARCA's receipt of payment from the customer.

All purchases made by the Company shall be paid back by ARCA in full plus an additional five percent surcharge or broker-type fee.

As of June 30, 2024, the Company had a full allowance of approximately $ 690,000 recorded in the reserve for doubtful accounts for the amount due.

On February 7, 2024, the Company converted outstanding receivables from JanOne and amounts due under the Purchase Agreement with ARCA Recycling into a promissory note with JanOne.

On March 6, 2024, the Company entered into a Note Sale Agreement (“NSA”) with an unaffiliated third party under which the third party acquired the promissory note for approximately $ 700,000 .

The NSA requires payment of 50 % of the amount due upon execution, and the balance due no later than three days following 60 days after the date of execution.

On March 11, 2024, the Company received payment of approximately $ 350,000 , which was recorded as other income, and recorded a receivable for the deferred payment, which was subsequently received on April 29, 2024.

In connection with the execution of the NSA, the Company recognized a gain of approximately $ 0.6 million in the second quarter.

As of December 31, 2024, the outstanding balance on this note was $ 5.0 million.

On December 14, 2024, in connection with the Settlement Agreement of the PMW Seller Financed Loans (see Note 12), the Company, as borrower, entered into a promissory note for the benefit of ICG in the amount of approximately $ 2.6 million (“ICG PMW Note”).

The Company received proceeds of approximately $ 1.9 million from ICG, which was used to settle the loans plus accrued interest.

The $ 700,000 discount is being accreted to interest expense using the effective interest rate method, as required by U.S.

GAAP, over the term of the note.

The ICG PMW Note matures on December 17, 2029, and bears interest at the contractual rate of 12 % per annum.

Interest is payable in arrears on the first business day of each month commencing on January 2, 2025.

As of December 31, 2024, the balance on this loan was approximately $ 2.6 million.

Transactions with Vintage Stock CEO

Rodney Spriggs, the President and Chief Executive Officer of Vintage Stock, Inc., a wholly owned subsidiary of the Company, is the sole member of Spriggs Investments, LLC (“Spriggs Investments”).

Rodney Spriggs, the President and Chief Executive Officer of Vintage Stock, a wholly owned subsidiary of the Company, is the sole member of Spriggs Investments, LLC (“Spriggs Investments”).

Spriggs Promissory Note I

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All monthly payments under the original Spriggs Promissory Note I remain in effect through the maturity date as amended.

As of June 30, 2024 and September 30, 2023, the principal amount owed was $ 1.1 million and $ 2.0 million, respectively.

As of December 31, 2024 and September 30, 2024, the principal amount owed was $ 0.5 million and $ 0.8 million, respectively.

Spriggs Promissory Note II

5 unchanged sentences

All monthly payments under the original Spriggs Loan II remain in effect through the maturity date as amended.

As of June 30, 2024 and September 30, 2023, the principal amount owed was $ 1.0 million.

As of December 31, 2024 and September 30, 2024, the principal amount owed was $ 1.0 million.

Transactions with ALT5 Sigma Corporation, formerly JanOne Inc.

Tony Isaac, a member of the Company's board of directors, and father of the Company's CEO, Jon Isaac, is the President and a director of ALT5 Sigma Corporation (“ALT5”), formerly JanOne Inc.

Richard Butler, a member of the Company's board of directors, is a director of ALT5.

Lease Agreement

Customer Connexx LLC, formerly a subsidiary of ALT5, previously rented approximately 9,900 square feet of office space from the Company at its Las Vegas office, which totals 16,500 square feet.

ALT5 paid the Company $ 27,000 and $ 36,000 in rent and other reimbursed expenses for three months ended December 31, 2024 and 2023, respectively.

Transactions with Spyglass Estate Planning, LLC

7 unchanged sentences

Stephen Kellogg is the Chief Executive Officer of Flooring Liquidators, a wholly owned subsidiary of the Company.

Flooring Liquidators leases four properties from K2L Property Management, and one from Railroad Investments, each of which Mr.

Flooring Liquidators and Elite Builder Services, Inc., collectively, lease four properties from K2L Property Management, LLC, and two from Railroad Investments, LLC, each of which Mr.

Kellogg is a member.

Additionally, Flooring Liquidators leases two properties from Stephen Kellogg and Kimberly Hendrick as a couple, and properties from each of The Stephen Kellogg and Kimberly Hendrick Trust, The Stephen Kellogg Trust, and Mr.

Kellogg personally.

Additionally, Flooring Liquidators leases two properties from Stephen Kellogg and Kimberly Hendrick as a couple, one property from The Stephen J.

Kellogg Revocable Trust and Kimberly M Kellogg Revocable Trust, collectively, and one property from The Stephen J.

Kellogg Revocable Trust.

Hendrick is Mr.

Kellogg's spouse.

Kellogg's former spouse.

The Company routinely enters into related-party seller notes in conjunction with its acquisitions.

See Note 12 for the details related to existing seller notes.

Procedures for Approval of Related Party Transactions

In accordance with its charter, the Audit Committee reviews and approves all related party transactions (as such term is defined for purposes of Item 404 of Regulation S-K).

The Audit Committee participated in the review, approval, or ratification of the transactions described above.

Commitments and Contingencies

SEC Investigation

On February 21, 2018, the Company received a subpoena from the Securities and Exchange Commission (“SEC”) and a letter from the SEC stating that it was conducting an investigation.

On February 21, 2018, the Company received a subpoena from the SEC and a letter from the SEC stating that it was conducting an investigation.

The subpoena requested documents and information concerning, among other things, the restatement of the Company’s financial statements for the quarterly periods ended December 31, 2016, March 31, 2017, and June 30, 2017, the acquisition of Marquis Industries, Inc., Vintage Stock, Inc., and ApplianceSmart, Inc., and the change in auditors.

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The SEC seeks permanent injunctions against the Company Defendants, permanent officer-and-director bars, disgorgement of profits, and civil penalties.

The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm.

The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at www.sec.gov/litigation/litreleases/2021/lr25155.htm.

On October 1, 2021, the Company Defendants and third-party defendants moved to dismiss the SEC complaint.

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The parties participated in a mediation in June 2023.

The mediation was not successful and the case is currently in the midst of discovery.

The mediation was not successful.

Fact discovery was completed on May 20, 2024.

The parties are currently engaged in expert discovery, which is set to conclude on August 26, 2024.

The Company Defendants strongly dispute and deny the allegations and intend to continue to defend themselves vigorously against the claims.

The parties completed expert discovery in September 2024 and filed cross Motions for Summary Judgment in October 2024.

The parties are currently preparing oppositions to the respective motions.

We expect it will take a number of months for the court to rule on the motions, during which time much of the activity in the case will be on pause.

Sieggreen Class Action

6 unchanged sentences

Plaintiff filed an Amended Complaint on March 6, 2023.

On May 5, 2023, the Company Defendants filed a Motion to Dismiss the Amended Complaint, and the briefing on that motion is now complete.

Discovery is automatically stayed in this case until after the disposition of the Motion to Dismiss.

The Motion to Dismiss is set for hearing on August 28, 2024.

If the Motion to Dismiss is not successful, the case will proceed to discovery.

The Company Defendants strongly dispute and deny the allegations at issue in this case and intend to continue to defend themselves vigorously against these claims.

On May 5, 2023, the Company Defendants filed a Motion to Dismiss the Amended Complaint.

The Motion to Dismiss was heard on September 30, 2024.

The Court granted the Motion with Leave to Amend.

The Second Amended Complaint was recently filed.

We are currently evaluating our response thereto which may result in another Motion to Dismiss being filed.

Holdback Matter

On October 10, 2022, a representative for the former shareholders of Precision Industries, Inc.

filed a civil complaint in the Court of Chancery of the State of Delaware.

On October 10, 2022, a representative for the former shareholders of Precision Marshall filed a civil Complaint in the Court of Chancery of the State of Delaware.

The Complaint alleged that the Company violated the terms of an Agreement and Plan of Merger dated July 14, 2020, by failing to pay the shareholders a certain indemnity holdback of $ 2,500,000 .

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On April 10, 2024, the district court dismissed the individual shareholders, leaving intact the Company’s misrepresentation claims against the shareholder representative.

The Court subsequently denied the shareholder representative's motion for leave to amend to assert statute of limitation defenses.

The Company expects discovery to last for approximately one year .

The Court recently denied plaintiff’s Motion for Leave to Amend to assert statute of limitations defenses.

Discovery is ongoing and is expected to last six months .

Wage and Hour Matter

On July 27, 2022, Irma Sanchez, a former employee of Elite Builder Services, Inc.

(“Elite Builders”), filed a class action complaint against Elite Builders in the Superior Court of California, County of Alameda, which was transferred to Stanislaus County.

(“Elite Builders”), filed a class action Complaint against Elite Builders in the Superior Court of California, County of Alameda, which case was transferred to Stanislaus Count.

The Complaint alleges that Elite Builders failed to pay all minimum and overtime wages, failed to provide lawful meal periods and rest breaks, failed to provide accurate itemized wage statements, and failed to pay all wages due upon separation as required by California law.

The Complaint was later amended as a matter of right on October 4, 2022.

Sanchez put the Labor & Workforce Development Agency on notice to exhaust administrative remedies and enable her to bring an additional claim under the California Labor Code Private Attorneys General Act, which permits an employee to assert a claim for violations of certain California Labor Code provisions on behalf of all aggrieved employees to recover statutory penalties.

The parties have agreed to participate in mediation on October 30, 2024, in an effort to minimize litigation costs and seek resolution.

Sanchez has put the Labor & Workforce Development Agency on notice to exhaust administrative remedies and enable her to bring an additional claim under the California Labor Code Private Attorneys General Act, which permits an employee to assert a claim for violations of certain California Labor Code provisions on behalf of all aggrieved employees to recover statutory penalties.

The parties agreed to mediation on October 30, 2024 in an effort to minimize litigation costs and seek an early reasonable resolution.

However, the mediation was postponed and the parties a working on setting a new mediation date and anticipate it will occur in April 2025.

The Company is involved in various claims and lawsuits arising in the normal course of business.

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The following tables summarize segment information (in $000's):

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

For the Three Months Ended December 31,

Retail-Entertainment $ 21,273 $ 20,586

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Corporate & Other ( 883 ) ( 1,152 )

Total (loss) net income before provision for income taxes $ ( 3,823 ) $ 1,357 $ ( 9,227 ) $ 5,924

Total net income (loss) before provision for income taxes $ 573 $ ( 906 )

Subsequent Events

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements